Market analysis and trade recommendations by FBS

[riki143]

MARKET NEWS
21 July 2014

BMO: data to watch for EUR

BMO Capital points out that the main focus for euro this week will be on the preliminary July PMIs due on Thursday and the German IFO Business Climate Index due on Friday.

According to the analysts, if the French or German PMIs drift lower, bears will pull EUR/USD to $1.3450. Still BMO underlines that for the bears to succeed they need good data from the US. All in all, the specialists expect that EUR/USD will be sold this week on the rallies to $1.3550 as we’ve seen today ahead of the releases on Thursday and Friday.

US dollar, on the contrary, is supported ahead of the American inflation data due tomorrow. According to the survey conducted by Bloomberg, economists expect US consumer prices to have climbed at an annual rate of 2.1% in June matching May’s figure that was the most since October 2012. High inflation strengthens the cause for an earlier-than-expected rate increase in the US and is USD-positive.


More:
http://fxbazooka.com/en/news/show/1490

 

[riki143]

MARKET NEWS

21th of July: American session

Tatyana Norkina, analyst of the company FBS

U.S. dollar index is moderately recovering at the opening session and increasing about 0.05%. Stock markets were opened with the gapdown of nearly 0.30%. It should be mentioned that there will be no publication of important macroeconomic indicators expected today, therefore tradings will be likely of pure technical nature.

Currency pairs are traded on Friday levels. Thus, the pair EUR / USD went back to 1.3510/1.3520 after the morning testing 13550. The pair GBP / USD is gravitating foward the bear market: the pair failed to recover above 1.7090 in the day time and is trading at 1.7060 now. As to USD / CHF it is consolidating just above 0.8980, though bulls do not resolve to overcome 0.8990. Currency pair USD / JPY is moving in the upper range of 101.20-101.35.

More:
http://fxbazooka.com/en/news/show/1492

 

[riki143]

MARKET NEWS

July 22: Asian session

Asian shares rose as investors bet rising tensions in Ukraine over the shooting down of a jetliner won’t curb global economic growth. Nikkei 225 advanced by 1%. US dollar index remains near 1-month high as an increase in short-term US Treasury yields signaled mounting speculation the Fed will raise interest rates.

AUD/USD strengthened from the session low of $0.9350 into the $0.9390 area. RBA Governor Stevens held a speech, but didn’t talk the Aussie down. NZD/USD consolidates in a narrow $0.8670/90 range. Gold weakened to $1306.20.

USD/JPY rose to 101.50. EUR/USD is frozen at $1.3522. GBP/USD is little changed in the $1.7075 area.

More:
http://fxbazooka.com/en/news/show/1493

 

[riki143]

MARKET NEWS
22 July 2014

Russian-Ukrainian conflict in the limelight

Economists at Deutsche Bank expect to see new developments in the Russian-Ukrainian crisis today with the EU finance ministers holding a meeting to discuss a possibility of imposing new sanctions on Russia. At least, the US president Obama urges the European government to do so. Meanwhile, Kremlin is denying responsibility for the Malaysian plane crash in Donetsk.

"There is a real possibility of a ratcheting up of sanctions on Russia later this week – including possibly more hard-hitting “level 3” sanctions. The US may find it economically easier to deal with this outcome than Europe though."

"Perhaps the most market-friendly outcome is that EU leaders talk very tough but do not agree on intensifying sanctions against Russia", Deutsche Bank says. According to Reuters sources, despite all the tough talk, the EU is unlikely to punish Russia beyond the speeding up of the imposition of already agreed individual sanctions.

 

[riki143]

MARKET NEWS

Key option levels (July 22)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3450, $1.3500, $1.3540, $1.3550 (large), $1.3565, $1.3580, $1.3600;

GBP/USD: $1.7075;

USD/JPY: 101.00, 101.75, 101.95, 102.15 (large);

USD/CHF: 0.9050;

AUD/USD: $0.9365;

USD/CAD: 1.0745 (large), 1.0765, 1.0800;

NZD/USD: $0.8575, 0.8665;

EUR/GBP: 0.7975;

EUR/JPY: 137.00.

More:
http://fxbazooka.com/en/news/show/1495

 

[riki143]

MARKET NEWS
22 July 2014

EUR/USD below $1.3500

EUR/USD hit $1.3477, the lowest level since the beginning of February. The single currency was sold-off as the European trade started.

The sentiment about the single currency was bearish and in absence of positive developments this made euro fall triggering sell stops. Potential further EU sanctions on Russia keep EUR/USD under pressure. USD bulls on the other hand, are active ahead of the US CPI release at 12:30 GMT.

Note that EUR/USD is oversold in the short term and the RSI and MACD on H4 didn’t confirm this fresh low.

Support us at $1.3476, $1.3450 and $1.3425/15 (200-week MA/June 2013 high). Resistance is at $1.3529, $1.3550 and $1.3575.

Chart. H4 EUR/USD

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http://fxbazooka.com/en/news/show/1496

 

[riki143]

MARKET NEWS
22 July 2014

Euro area: debt mounts

According to the EU’s statistics office Eurostat, euro zone’s government debt rose from 8.90B euro in Q4 2013 (92.7% of GDP) to 9.05B euro in Q1 2014 (93.9% of GDP). The biggest increases in debt were in Slovenia and Belgium (7 and 3.9 percentage points respectively).

Greece, the bloc’s third-biggest economy Italy and Portugal have the highest debt levels (174.1%, 135.6% and 132.9% of GDP respectively).

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http://fxbazooka.com/en/news/show/1497

 

[riki143]

MARKET NEWS

July 23: Asian session

Asian shares rose for a third day, with the regional benchmark index extending a 6-year high, as lower US inflation data damped concerns interest-rate increases will be brought forward. MSCI Asia Pacific Index outside of Japan gained 0.4%. Nikkei 225 slid by 0.1%. USD/JPY slid below 101.40.

AUD/USD jumped from the $0.9380 area to $0.9435, inspired by the better-than-expected Q2 inflation data in Australia. CPI came in line with forecast at 0.5%, while trimmed mean CPI rose from 0.6% to 0.8%. Higher inflation makes it more difficult for the RBA to shift from its current neutral stance to dovish. NZD/USD strengthened to $0.8680.

EUR/USD is trading in the $1.3460 area after it lost about 60 pips yesterday falling to an 8-month minimum. GBP/USD edged up to $1.7075 from yesterday’s low at $1.7040.

More:
http://fxbazooka.com/en/news/show/1499

 

[riki143]

MARKET NEWS

Key option levels (July 23)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3450, $1.3470 $1.3500 (large), $1.3545/50 (large);

USD/JPY: 101.70, 101.85, 102.15/30;

USD/CHF: 0.8875, 0.9050;

AUD/USD: $0.9325 (large), $0.9350;

USD/CAD: 1.0745, 1.0800 (large);

EUR/JPY: 136.75;

EUR/GBP: 0.7990/8000.

More:
http://fxbazooka.com/en/news/show/1500

 

[riki143]

MARKET NEWS
23 July 2014

AUD: higher inflation and what it means

AUD/USD strengthened to $0.9440 after a government report showed annual inflation accelerated to the fastest pace in 4 years. Australian consumer prices climbed 3% in Q2 from a year earlier, matching estimates. The RBA aims for inflation of between 2 and 3%. Trimmed mean CPI reading, which excludes the most volatile components, increased by 2.9% y/y vs. 2.7% expected.

As a result, traders pared bets that the Reserve Bank of Australia will cut interest rates next year. According to Westpac, as inflation is currently low in the many countries of the world, higher reading from Australia caused AUD/USD to rise. HSBC points out that it will be now more difficult for the RBA to lower the national currency and convince the market that it will likely cut interest rates further when inflation is in the upper part of their target band.

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http://fxbazooka.com/en/news/show/1501

 

[riki143]

MARKET NEWS
23 July 2014

BoE policy minutes in focus

Market attention is now focused on the June BoE meeting minutes release at 8:30 GMT. According to currency analysts at RBS, The British currency may lose some ground on the release.

Economists are convinced that the UK regulator unanimously voted in favor of unchanged monetary policy. Note that high UK inflation was released a few weeks after the June meeting, so the Bank hadn’t had enough ground to turn hawkish yet.

They see the August meeting as a more likely time to see divergence of views in the MPC. By the way, August meeting will coincide with inflation forecasts and a fresh Quarterly Inflation Report.

More:
http://fxbazooka.com/en/news/show/1502

 

[riki143]

MARKET NEWS
23 July 2014

USD is still the dominant power

It’s the 70th anniversary of the Bretton Woods Conference which created the foundations of the global monetary system based on the US dollar we have today.

Despite the efforts to step away from American currency, companies, consumers and central banks around the world prefer the US dollar to other currencies. Almost 90% of the $5.3 trillion a day in foreign-exchange transactions last year involved USD – and this percentage is the same as it was in 1989. Here's the infographics done by Bloomberg:

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http://fxbazooka.com/en/news/show/1503

 

[riki143]

MARKET NEWS
23 July 2014

Key takeaways from the BOE minutes

As it was expected, GBP/USD weakened below the $1.7060 mark post the MPC minutes release.

The document brought no surprises with all the 9 Commitee members voting to leave rates unchanged. There was no inspiration for the hawks in the document, but market particpants know that the July meeting was held before the upbeat UK inflation release.
MPC has no preset view rate rise terms, it will be data-dependent;
Indications of inflationary pressures areincreasing;
BOE expects Q2 GBP growth of 0.9% before slowing modestly in Q3 & Q4. UK Q1 GDP will be revised up to to 0.9%. (Don't forget that Q2 GDP will be released on Friday).
Waiting for the BoE Governor Carney speech at 11:45 GMT. Given the upbeat GDP forecast, we expect cable to remain supported at 1.7040.

Chart. H1 GBP/USD

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http://fxbazooka.com/en/news/show/1504

 

[riki143]

MARKET NEWS
23 July 2014

BOE Carney speech: quotes

The BoE Governor Carney increased selling pressure on GBP/USD, dampening expectations of an early rate hike.

Key Carney's quotes:

UK economy is still in extraordinary times
There is no clear timing on rate hikes, they will be gradual
The BOE is balancing inflation implications from sustained economic momentum versus conflicting signals of labour market slack
Expensive currency weighs on the economy
Government needs to be careful that household indebtedness doesn’t pull the economy back into recession
UK economy is currently producing as much as in did at the pre-crisis time
"Next inflation report will provide the next opportunity to update our thinking on these important questions" (next report is August 13th)
GBP/USD slipped to $1.7020 as of writing.

More:
http://fxbazooka.com/en/news/show/1505

 

[riki143]

MARKET NEWS

23 July: American session

Tatiana Norkina, an analyst at FBS

There are mixed feelings in the markets today in early U.S. session. Yesterday's strong growth in the dollar has been transformed into a protracted outset in the absence of important economic indicators. The dollar index remains in 80.85 (-0.01%), but with some probability of further recovery. Trading in the stock markets opened in opposite directions. Thus DJIAna is currently losing 0.15% and S & P500, on the contrary, adds about +0.20%.

The similar situation is spotted in the currency markets - trades are conducted relatively quietly. The EUR / USD is consolidating in the range of 1.3455-1.3470. Obviously, the pair remains under bearish pressure. The USD / CHF currency pair updated its maximum of 10 pips, reaching the 0.9030 level, but then went under the figure of 0.9020. The USD / JPY is trading below the Ichimoku cloud time, in the area of 101.40, which gives grounds to predict its imminent decline to the 101.20 figure. The GBP / USD, pulled out of the common context sfter M.Carney's speech and a number of negative statistics having been released, collapsed to the 1.7030 support area. Bulls are trying to regain lost ground, but the major bearish trend still remains in force.

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http://fxbazooka.com/en/news/show/1506

 

[riki143]

MARKET NEWS

July 24: Asian session

Asian shares traded near a 6-year high after a Chinese manufacturing gauge rose to its strongest reading in 18 months. MSCI Asia Pacific Index outside of Japan added 0.4%. Nikkei 225 is down by 0.34% as Japanese trade deficit widened more than expected. USD/JPY rose to 101.57, but then dipped below the opening level of 101.47.

NZD/USD fell by 120 pips in the Asian trade, hitting a one-month low of $0.8575. Despite the interest rate was raised again by 0.25% to 3.5%, RBNZ Governor Wheeler signaled a pause to the tightening cycle at least until December, as the regulator now needs time to access the impact of higher rates. June NZ trade balance came out better than expected with a 247M surplus, but the market didn’t pay much attention to that. AUD/USD consolidates in a narrow $0.9470/35 range. The price has initially spiked on upbeat China PMI, but is now below the yesterday’s high.

EUR/USD is trading a bit on the downside, but almost flat in the $1.3460/55 area. GBP/USD edged down to $1.7030.

More:
http://www.fxbazooka.com/en/news/show/1508

 

[riki143]

MARKET NEWS

Key option levels (July 24)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3440, $1.3450 (large), $1.3475 $1.3500 (large), $1.3520/30 (large);

GBP/USD: $1.6900, $1.7000, $1.7020, $1.7095;

USD/JPY: 101.50/55 (large), 101.65/75 (large), 101.80/90 (large);

AUD/USD: $0.9300/25 (large), $0.9340, $0.9400 (large), $0.9450;

USD/CAD: 1.0680, 1.0700, 1.0725, 1.0790 (large);

NZD/USD: $0.8600, $0.8625, $0.8640, $0.8700, $0.8740;

EUR/GBP: 0.7800 (large), 0.8000;

EUR/JPY: 136.75.

More:
http://www.fxbazooka.com/en/news/show/1509

 

[riki143]

MARKET NEWS
24 July 2014

GBP/USD hit $1.7008 on retail sales

June retail sales rose by 0.1% m/m and 3.6% y/y vs. 0.2% and 3.9% y/y growth expected. However, despite the June stagnation, the overall Q2 retail sales volumes were the strongest in 10 years.

June data added to yesterday's market pessimism, pulling GBP/USD down to $1.7008. Buy orders for the pair are clustered at $1.7000/10, while sell stop orders lie below $1.6990.

Meanwhile, EUR/GBP extended the upside to 0.8926. Combination of upbeat euro zone data and weak UK figures is very supportive for the cross.

 

[riki143]

MARKET NEWS
24 July 2014

EUR is cheered up by PMIs

EUR/USD recovered to $1.3485 as the euro area released mainly better than expected PMIs from the euro area. European stocks rose with Euro Stoxx 50 index adding 0.6%.

The preliminary euro zone’s manufacturing PMI rose to 51.9 in July from 51.8 in June. Services PMI jumped to 54.4 from 52.8, against forecasts of dropping to 52.7. German PMI came out above expectations with a strong reading of 52.9 vs. 52.0 expected. France lagged as its manufacturing PMI fell from 48.2 to 47.6. Negative news came from Italy where retail sales contracted by 0.1%.

Resistance is at $1.3500 and $1.3525, while support is at $1.3450 and $1.3425.

 

[riki143]

MARKET NEWS

July 24: American Session

Tatiana Norkina, analyst at FBS

U.S. dollar shows strength after the release of labor market data. The number of unemployment benefits applications for the past week has fallen to 284 thousand, from 303 thousand. Analysts had predicted an increase to 308 thousand. This encouraged strenghtening of the dollar index which is now adding about 0.10%. Stock markets have opened not that positively. DJIA and S&P500 have gone into the red zone, losing about 0.03%.

Currency pairs are trading rather nervously today. Thus, the EUR/USD pair was consolidsating to 1.3485 after the release of positive statistics on eurozone, but then corrected to the 1.3460 area. The USD/CHF currency pair has found support at 0.9010 and is now consolidating around 0.9020. USD/JPY fixed above 101.40, then rose to the 101.80 resistance. Corrective fall of the GBP/USD pair has continued today: the bears have lowered the rate to 1.6970.

More:
http://fxbazooka.com/en/news/show/1514